Randy, I don't know your client's legal needs, obviously. I'm surprised that the existence of a feature in Moodle caused them to drop Moodle altogether, even though the feature does nothing unless sub-components (models) are manually enabled. Since this is such a concern for your client, I feel I should point out that most LMS software includes fairly extensive logging (and if hosted by a provider, you have little idea of what they are doing with those logs).
If a switch to disable the Moodle Learning Analytics feature is required for many Moodle users and/or clients, I encourage someone from the Moodle community to post a tracker ticket describing how you expect it to work and what visibility (if any) needs to be provided to site administrators, users, managers, etc. It will be best if someone who has an identified need writes the request, so we can be sure your needs are identified, though I'm happy to help with clarifications.